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This essay is to clarify the frequently asked question, what is bank account balance in new cash reports, like cash position. The question can be answered if we clarify what the actual bank account balance is, as the forecasted balance is simply adding forecasted cash flows.

To achieve the goal, we will first clarify several typical misunderstandings (what is not actual bank account balance in cash position), then what is the logic in new cash management, finally, what are options you can get the desired bank account balance in new cash.

 

Misunderstandings

Misunderstanding#1: actual bank account balance in cash position = corresponding bank G/L account balance

You probably want to compare the balances between cash position and G/L, because both are ‘balances’. It is not correct. Simply because G/L account balance is based on Posting Date while bank account balance in cash position is based on Value Date, or sometimes, we call the difference between Accounting View Balance and Cash View Balance.

If you think in your case Value Date is always the same as Posting Date, but the balances still could be different, because different from classic cash management, the balance in new cash management is not only from accounting, but also from other sources, for example, bank statement that is not yet posted. The enhancement can help Cash Manager to get real-time up-to-date balance as soon as the statement is imported, instead of waiting for the accounting postings, because posting could fail.

Misunderstanding#2: actual bank account balance = balance from bank statement (FEBKO)

It sounds like a reasonable expectation as well. However, it is not 100% correct, in some cases, bank statement contains items whose value date is not the same as bank statement date, for instance, several days in future, means, those cash flows also are listed in bank statement that you can post to your G/L, but in the eye of cash manager, the money is not yet hit the bank account, the company cannot make use of it. In this sense, bank statement is more for book keeping instead of telling you the exact money you are having in bank account.

 

Briefly speaking, actual bank account balance in cash management is simply the money that is physically in your bank account that you can make use of right now, which usually you can request via bank portal.

 

The Way New Cash Management Calculates Actual Bank Account Balance

The second question is how new Cash Management calculates actual bank account balance.

We don’t get the available balance directly from bank, which is probably quite costly and some banks even cannot provide such service (API), thus we get the information from what is available in SAP S/4HANA system.

As you probably already know, in new cash management, nearly all cash flows are from one table FQM_FLOW, aka, One Exposure from Operations, and actual bank account balance is purely from this table. One Exposure from Operations is kind of container, which integrates information from different source applications, like Accounting, MM, SD, TRM and so on. And in principle, each entry in FQM_FLOW is a flow, means, we don’t save balance directly.

This leads to the way how new cash management calculates balance: it aggregates all actual cash flows from One Exposure from Operations.

Actual Cash Flows can come from different source applications, including:

  1. Day-end Bank Statement, if one bank statement is imported, all items are integrated to FQM one by one, the value date from bank statement items (FEBEP) is saved in FQM as well
  2. FI postings on bank G/L accounts, which could be manual posting or integrated posting from bank statement importing process. And once bank statement items are posted to FI, the actual flow from bank statement are removed from FQM to avoid duplications.
  3. Bank account balance uploaded via excel for those bank accounts which are operated remotely.
  4. Bank account balance available in FQM via initialization tool, after initializing the bank account balance, the actual balance later on will be the sum of initialized balance and actual cash flows afterwards.
  5. In multiple system scenarios, you can integrate actual cash flows from remote system via Distributed Cash Management or Liquidity Planner, those actual cash flows also contribute the actual bank account balance.

 

How to Get Desired Bank Account Balance

Now, things become clear how you can impact the balance if you understand how new cash calculates the balance or what processes will impact balance. You can have following options/tools to get the balance:

  1. You need to initialize the bank account balance (FQM_INIT_BALANCES – Import Initial Bank Account Balances) in the very beginning before loading any actual cash flows from other source applications. This is only required for bank accounts which are operated centrally (in the same system as cash management), and this is setup in Bank Account Management master data, Connectivity Path, more specifically.
  2. Import day-end bank statement – this is obvious.
  3. Post FI document on bank G/L accounts, system recognizes bank G/L account with pre-defined logic, while you can overwrite the rule by assigning flow type to the G/L account.
  4. For the remote operated bank accounts, you can upload daily balance via excel in tool FQM21 – Import Bank Cash Balances.
  5. If you have setup the remote system scenario (distributed cash or liquidity planner), you can push or pull actual cash flows from remote systems. And for distributed cash management, you can map the G/L accounts to bank account in BAM-connectivity path. While for liquidity planner, you can only report on G/L accounts by default.
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